Davies sees bright future for Unisys
Past year has focused on reducing debt and maximizing profitability, with the federal division leading the way
Unisys Corp.’s success in the federal market doesn't depend on winning the Transportation Security Administration’s Information Technology Infrastructure Program,
recently captured by Computer Sciences Corp.
- By David Hubler
- Oct 09, 2009
Under new leadership for the past year — Ed Coleman became chairman and chief executive officer in October 2008 and Ted Davies was named president of the federal sector at about the same time — Unisys has focused on increasing profitability and reducing debt. The federal sector has led the way, according to Securities and Exchange Commission filings.
Associate Editor David Hubler recently spoke with Davies about Unisys’ turnaround year and what is expected in 2010.
WT: What impact does the loss of the ITIP program have on Unisys federal?
Davies: We are extremely proud of what we have accomplished with TSA since 2002. Very few companies have the opportunity to stand up the infrastructure for a brand new organization — and we did it during a time of national crisis.
Having said that, we did have to consider this outcome in our planning for this year. Over the course of this year, we have grown in nearly every key federal government account and have a robust pipeline of new opportunities covering all of our company’s areas of strength. I remain upbeat and excited about our business plans for 2010 and beyond.
WT: How have you righted the Unisys ship?
Davies: One thing that [Coleman] clarified right away was we’re going to manage this company through four business units. Federal is one business unit, so we manage through the unit, not through the [former] regional infrastructure. That was very important.
The other big thing is we were doing a lot of things for a lot of people. Now we have four core focuses: security, data center outsourcing and transformation services, applications outsourcing and modernization services, and global infrastructure management. We’ve spent the last six months developing solutions for all those areas and leveraging them across the company. We’ve also reduced nonproductive costs by hundreds of millions of dollars and done organizational streamlining and margin improvement initiatives.
WT: How have those changes affected the federal unit?
Davies: We’ve had a really strong year. Our first two quarters have shown double-digit revenue growth and a huge swing in profitability, tens of millions of dollars, year over year from ’08 to ’09. We have all of our four portfolio solutions — with engineering led by P.V., Venkatapathi Puvvada, our chief technology officer. That is driving more efficiency in the way we deliver projects and propose solutions.
WT: How much of your new structure and strategy is the result of the recession and tighter federal budgets?
Davies: Some of our recent growth has come from new wins, but a lot has come from growing our current relationships. Now that we have four well-defined areas of focus, we’re equipping our teams in the field to listen to clients’ needs, such as running out of space in a data center. Our folks can bring in someone from P.V.’s team to suggest solutions. That’s a good way to do business whether there are tight budgets or not.
WT: You talked earlier about improving employee skills and using them across what you call communities of practice. How is that working?
Davies: The leadership program we had for midlevel managers has now been adapted for our lower level folks. We recently launched a community of practice around application modernization. For example, we have folks in St. Louis working on application modernization for the Agriculture Department. Their work might be similar to work we are doing for Health and Human Services, Justice or Customs and Border Protection. Our folks can now connect to a community of practice to share lessons learned, best practices and discuss new technologies and approaches.